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Bitcoin Tops $50USD on MtGox

mtgox.com

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Re: Bitcoin Tops $50USD on MtGox

#51

Post by stcredzero »

shredfvz wrote: post #39
arasmussen wrote: post #10

It's literally doubled in a month. This is out of control.

Facebook's market cap is $63,000,000,000. If the market cap of Bitcoin were just 10% of Facebook, each Bitcoin would be worth about $500. 1% and it's about $50. Can a global financial system conceivably give the world just 10% of the value of Facebook? Because just ten percent ... and one BTC is $500. Oh, but clearly society demands Farmville, you say? Clearly we don't need a new financial system ... more than we nee…

> Bitcoin is valuable because the world desperately needs to escape the current financial system. Individual sovereignty and financial privacy are the most scarce resources on the planet, bar none.

Someone needs a way to sell firearms, ammo, and canned goods for BTC. That sounds funny, but I'm dead serious. Local laws against shipping arms can often be worked around.

Re: Bitcoin Tops $50USD on MtGox

#52

Post by BrianEatWorld »

Helianthus wrote: post #19
BrianEatWorld wrote: post #9

Earlier quoted context omitted.

It seems funny to assume that. I mean I haven't been tracking the underlying fundamentals, but the nature of most currencies today is that because they are managed, they tend to go up and down. If the fundamentals are solid for Bitcoins, as in there is actually increasing demand (which seems feasible given all the new services advertising their acceptance) and the supply is increasing in tune with expectations (which…

I don't believe that you actually have any understanding of the supply/demand economics of booms/busts necessary to be skeptical of parent. Increasing demand of a finite resource drives the price up. This drives the demand up even more. The real value of a Bitcoin is still in USD, of course, so at some point it's going to cross over a line where the people holding Bitcoins want to get rid of it. Decreasing demand of…

Your analysis holds true if you are treating bitcoins as purely speculative.

You are correct that I don't fully understand supply/demand economics, because as an Austrian theorist, my concepts relating to booms and busts use dynamic models and not the statics you are using to prove your point. In a static situation, increasing demand of a finite resource does drive the price up, which can drive up demand even more, but thats if you ignore the effect of substitutes, which for both the exchange and speculative value of bitcoins, there are several.

Do I really think that it has doubled? No. But I don't think that people expecting a large crash like before are doing so because they understand the fundamentals. I think, as in any market, you do have speculators, but I also think that the legitimate demand for bitcoins as a means for exchange has gone up since the previous crash providing a more solid basis for the higher price.

Re: Bitcoin Tops $50USD on MtGox

#53

Post by [deleted] »

T-hawk wrote: post #45
habosa wrote: post #16

Is there any exchange where I can short sell bitcoins? Besides the fact that this will almost definitely be a profitable strategy in the near future, it would seem that allowing both short and long positions would create market stability. Most securities exchanges allow both short and long positions.

This comes up on most Bitcoin threads, and you'd think a google search could answer that, but the results are pretty unclear. Apparently Bitcoinica used to but no longer exists. The lack of a direct answer would suggest no, unless someone here chimes in otherwise. Shorting isn't possible within the Bitcoin protocol itself, since there's no mechanism for the lender to compel the short-seller to cover and return the bo…

[deleted]

Re: Bitcoin Tops $50USD on MtGox

#55

Post by gwern »

modeless wrote: post #29
oscilloscope wrote: post #18

Earlier quoted context omitted.

Here's a list of the top 100 large wallets from Dec, 2011. The biggest wallet then had 447785 BTC. Anyone have an updated list? http://bitcoinreport.appspot.com/

Wow, this is a fascinating list. So we know there are at least 25 bitcoin millionaires (bitcoin wallets with value > $1,000,000 USD).

No, we know that there is some fuzzy nebulous number of bitcoin millionaires which may be centered around 25 - more based on how many have coins split across many addresses, and less based on the known fact that many earlier miners didn't store their coins safely (because it was just an interesting crypto prototype they were playing with) and many tens of thousands of coins have been lost. (That Polish exchange running on Amazon without backups took out, IIRC, something like 10k all on its own.)

Re: Bitcoin Tops $50USD on MtGox

#56

Post by modeless »

icebraining wrote: post #33
modeless wrote: post #29

Earlier quoted context omitted.

Wow, this is a fascinating list. So we know there are at least 25 bitcoin millionaires (bitcoin wallets with value > $1,000,000 USD).

For such large amounts, you can't simply calculate the number of bitcoins * price per bitcoin, since the act of selling such large amounts would itself affect the price.

This is true, of course (and a pet peeve of mine when people naively calculate e.g. how much it would cost to replace all coal-fired power plants in the world with solar). However, these days MtGox's average daily volume is in the $1m range. I think you could sell $1m BTC over a couple of weeks without anyone even noticing.

Re: Bitcoin Tops $50USD on MtGox

#57

Post by citricsquid »

frisco wrote: post #37

Don't listen to the "it's out of control" or "is very due for a crash because it's rising so quickly" stuff. It comes down to a very simple test: do you think that there are significant reasons Bitcoin would or would not gain acceptance as a mainstream currency? A few reasons I can think of why it would: * The current banking system is inherently insecure. If you have an account number and a routing number (written o…

> The current banking system is inherently insecure. If you have an account number and a routing number (written on the bottom of every check), you can pull money. Bitcoin is potentially much more secure.

If the company you store your wallet with is hacked you lose everything, if your laptop is stolen or your dropbox account is hacked... it's as safe as keeping cash in your apartment. If your bank fucks up your money is (almost always) insured.

http://arstechnica.com/tech-policy/2012/09/hacker-steals-250... http://arstechnica.com/business/2012/03/bitcoins-worth-22800... http://arstechnica.com/tech-policy/2011/06/bitcoin-price-plu...

> It's way too difficult to send money today, especially internationally, and fraud is a huge issue. We shouldn't need something like PayPal. Bitcoin solves this.

Fraud is a huge issue that Bitcoin does not solve. Send your money over bitcoin and it's gone, forever. Paypal etc. offer protections, they're not bulletproof but they're better than nothing.

Re: Bitcoin Tops $50USD on MtGox

#58

Post by panarky »

frisco wrote: post #37

Don't listen to the "it's out of control" or "is very due for a crash because it's rising so quickly" stuff. It comes down to a very simple test: do you think that there are significant reasons Bitcoin would or would not gain acceptance as a mainstream currency? A few reasons I can think of why it would: * The current banking system is inherently insecure. If you have an account number and a routing number (written o…

Thank you, this is the kind of well reasoned argument that makes HN worth it.

I don't pretend to know whether Bitcoin is going to $5,000 or to $0, but I do see a big market opportunity along with some very large risks.

Here are a few more:

* Positive: increasing mainstream interest and investments -- Coinbase, Silicon Valley Bank, Wordpress, Reddit, Mega, Tradehill, etc.

* Positive: greater public awareness of the risks of government monetary systems -- Cyprus confiscating bank deposits, central banks printing money, etc.

* Negative: online exchanges and wallet services frequently compromised.

* Negative: association with conspiracy theorists, fringe media personalities, etc.

Let's have a fact-based discussion. Speculation about exchange rates based only on gut instinct is just noise.

Re: Bitcoin Tops $50USD on MtGox

#59

Post by mrb »

plaguuuuuu wrote: post #40
trg2 wrote: post #3

Are bitcoins in a position to have a crash as tumultuous as last time, or is the currency more stable now overall?

It will probably crash. Obviously it has had greater accessibility and hype lately. Coupled with profitable mining becoming impossible for most people riding the boom looks more and more attractive. At some point in the future the buying volume will taper off due to less new speculators getting into the game. If BTC had anything actually underpinning its value we could work out the ratio of how overvalued it is. Unfo…

"Coupled with profitable mining becoming impossible"

Well it is incorrect to state that. Obviously, as the exchange rate increases, mining becomes more and more profitable. In fact, as of today ($50/BTC, difficulty factor around 4.9M, 25BTC/block) mining has never been so profitable in over a year(!) since January 2011 ($6/BTC, diff=1.1M, 50BTC/block)!

Re: Bitcoin Tops $50USD on MtGox

#60

Post by cstrat »

oscilloscope wrote: post #18
pokpokpok wrote: post #11

Earlier quoted context omitted.

how many is a large amount? 1000?

Here's a list of the top 100 large wallets from Dec, 2011. The biggest wallet then had 447785 BTC. Anyone have an updated list? http://bitcoinreport.appspot.com/

That is awesome. If you follow the chain of transactions from 12RYJjGk22NiNbhTHffCrCso4XgVzet5Eh (biggest wallet). It all ended up in a MtGox account...
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